Shari, if the servicer iliminates the prepayment penalty, would the loan originator not be on the hook to the holder of the debt? The originator of the note sold it off with the prepayment penalty to guarantee a certain amount of interest to the investor.

I can image that there’s a lot of backroom posturing among the originiators and the MBS/CDO holders as to which party is responsible for what.

Perhaps the banks are not trying to limit the meltdown but simply trying to limit their own losses.

What kind of modifications have you been able to negotiate. Can you give us some examples of what you’ve been able/not able to do for your customers?